ComEd 2015 Annual Report Download - page 289

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Merger integration costs. These amounts represent integration costs to achieve distribution synergies related to the Constellation merger
transaction. As a result of the MDPSC’s February 2013 rate order, BGE deferred $8 million related to non-severance merger integration costs
incurred during 2012 and the first quarter of 2013. Of these costs, $4 million was authorized to be amortized over a 5-year period that began in
March 2013. The recovery of the remaining $4 million was deferred. In the MDPSC’s December 2013 rate order, BGE was authorized to recover
the remaining $4 million and an additional $4 million of non-severance merger integration costs incurred during 2013. These costs are being
amortized over a 5-year period that began in December 2013. BGE is earning a return on this regulatory asset included in base rates.
Under (Over)-recovered electric and gas revenue decoupling. These amounts represent the electric and gas distribution costs
recoverable from or (refundable) to customers under BGE’s decoupling mechanism, which does not earn a rate of return. As of December 31,
2015, BGE had a regulatory asset of $30 million related to under-recovered electric revenue decoupling and a regulatory liability of $1 million
related to over-recovered natural gas revenue decoupling. As of December 31, 2014, BGE had a regulatory asset of $7 million related to under-
recovered electric revenue decoupling and a regulatory liability of $12 million related to over-recovered natural gas revenue decoupling.
CAP arrearage. These amounts represent the guaranteed recovery of previously incurred bad debt expense associated with the estimated
eligible CAP accounts receivable balances under the IPAF Program as provided by the 2015 electric distribution rate case settlement. These
costs are amortized as recovery is received through a combination of customer payments and rate recovery, including through future rate cases if
necessary. PECO is not earning a return on this regulatory asset.
Nuclear decommissioning. These amounts represent estimated future nuclear decommissioning costs for the Regulatory Agreement Units
that exceed (regulatory asset) or are less than (regulatory liability) the associated decommissioning trust fund assets. Exelon believes the trust
fund assets, including prospective earnings thereon and any future collections from customers, will be sufficient to fund the associated future
decommissioning costs at the time of decommissioning. Exelon is not accruing interest on these costs. See Note 16—Asset Retirement
Obligations for additional information.
Removal costs. These amounts represent funds ComEd and BGE have received from customers through depreciation rates to cover the
future non-legally required cost of removal of property, plant and equipment which reduces rate base for ratemaking purposes. This liability is
reduced as costs are incurred.
DLC program costs. The DLC program costs include equipment, installation, and information technology costs necessary to implement the
DLC Program under PECO’s EE&C Phase I Plans. PECO received full cost recovery through Phase I collections and will amortize the costs as a
credit to the income statement to offset the related depreciation expense during the same period through September 2025, which is the remaining
useful life of the assets. PECO is not paying interest on these over-recovered costs.
Electric distribution tax repairs. PECO’s 2010 electric distribution rate case settlement required that the expected cash benefit from the
application of Revenue Procedure 2011-43, which was issued on August 19, 2011, to prior tax years be refunded to customers over a seven-year
period. Credits began being reflected in customer bills on January 1, 2012. PECO’s 2015 electric distribution rate case settlement requires PECO
to pay interest on the unamortized balance of the tax-effected catch-up deduction beginning January 1, 2016.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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